Académique Documents
Professionnel Documents
Culture Documents
A three-pronged approach has been adopted to review and revitalize this market.
Firstly on policy front many legal and administrative hurdles in the functioning of
2
the market have been removed. Forward trading was permitted in cotton and jute
goods in 1998, followed by some oilseeds and their derivatives, such as groundnut,
mustard seed, sesame, cottonseed etc. in 1999. A statement in the first ever national
agricultural policy, issued in July, 2000by the government futures trading will be
encouraged in increasing number of commodities was of welcome change in the
government policy towered forward trading. Secondly, strengthening of
infrastructure and intuitional capabilities of the regulator and the existing
exchanges received priority.
The year 2003 market the real turning point in the policy framework for
commodity market when the government issued notification for withdrawing all
prohibition and opening up forward in all the commodities. This period also
witnessed other reform, such as, amendments to the essential commodities act,
securities rules, which have reduced bottlenecks in the development and growth of
commodity market. Of the countrys total GDP, commodities related industries
constitute about roughly 50-60% , which itself cannot be ignored.
Most of the existing Indian commodity exchanges are single commodity platforms
are regional in nature, run mainly by entities which trade on them resulting in
substantial conflict of interests opaque in their functioning and have not used
technology to scale up their operations and reach to bring down their cost. But with
the strong emergence of national multi-commodity exchange Ltd, Ahmadabad
(NMCE), multi-commodity exchange Ltd., Mumbai (MCX), national commodities
and derivatives exchange, Mumbai (NCDEX), and national boarded of trade,
Indore (NBOT), all these shortcomings will be addressed rapidly. These exchanges
are expected to be role model to other exchanges and likely to compete for trade
not only among themselves but also with the existing exchanges.
MINISTRY OF
CONSUMER
AFEAIRS
FMC (FORWARDS
MARKET
COMMISSION)
COMMODITY
EXCHANG
NATIONAL
EXCHANGE
MCX
NCDEX
REGIONAL
EXCHANGE
NMCE
NBOT
20 OTHER
10
11
12
13
14
15
16
17
18
19
Dubai Mercantile Exchange (DME), [joint venture between Dubai holding and the
New York Mercantile Exchange (NYMEX)]
20
Regulators
Each exchange is normally regulated by a national governmental (or semigovernmental) regulatory agency:
Chinese
mainland
Hong Kong
India
Pakistan
Singapore
UK
USA
Malaysia
Security commission
MCX is India's No. 1 commodity exchange with 83% market share in 2009
7
Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil
and gold in futures trading (But actual volume is far behind CME group
volume as Silver is traded in 30 kg lots on MCX whereas CME traded in
Approx 155 kg Lot size same in Gold 1 kg : 3. kg Approx and Crude 100
Barrels : 1000 Barrels on CME) and major volume in manuplated as there
in no strict regulation in Indian markets just to Excalate the prices of Shares
of company. Also the major volume comes from Arbitration Of CME and
MCX which is also not legal to do. As of early 2010, the normal daily
turnover of MCX was about US$ 6 to 8 billion
MCX now reaches out to about 800 cities and towns in India with the help
of about 126,000 trading terminals
Long
(Bhavnagar),
Long (Govindgarh), Steel Flat, Tin, Silver HNI, Silver M, Silver Micro
Zinc
FIBER
ENERGY
Cotton L Staple, Cotton M Staple, Brent Crude Oil, Crude Oil, Furnace Oil,
Cotton S Staple, Cotton Yarn, Natural Gas, M. E. Sour Crude Oil, ATF,
Kapas, Jute
Electricity(Now delisted), Carbon Credit
SPICES
PLANTATIONS
Cardamom, Jeera, Pepper, Red
Arecanut, Cashew Kernel, Coffee (Robusta),
Chilli, Turmeric, Cumin Seed,
Rubber
Coriander
PULSES
PETROCHEMICALS
Chana, Masur, Yellow Peas, Tur, HDPE, Polypropylene(PP), PVC
8
Urad
OIL & OIL SEEDS
Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton Seed, Crude Palm
Oil, Groundnut Oil, KapasiaKhalli, Mustard Oil, Mustard Seed (Jaipur), Mustard
Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran
DOC, Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds
CEREALS
OTHERS
Maize, Barley, Rice, Sharbati Rice, Guargum, Guar Seed, Gurchaku, Mentha Oil,
Basmati Rice, Wheat
TRADING
The trading system on the NCDEX provides a fully automated screen based
trading for futures on commodities on a nationwide basis as well as online
monitoring and surveillance mechanism. It supports an order driven market and
provide complete transparency of trading operations. All contracts expire on the
20th of the expiry contracts would cease trading on the 20 th of February. If the 20th
of the expiry month holiday, the contract shall expire on the previous trading day.
New contract will be introduced on the trading day following the expiry of the near
month contract.
CLEARING
National Securities Clearing Corporation Limited (NSCCL) underrates clearing to
trade executed on the NCDEX. The settlement guarantee fund is maintained and
managed by NCDEX. Only clearing member including professional clearing
member (PCMs) only are entitled to clear and settle contract through the clearing
house. At NCDEX, after the trading hours on the expiry data, based on the
available information, the matching for deliveries takes place firstly, on the basis of
location and then randomly, keeping in view the factors such as available capacity
of the vault/warehouse, commodities already deposited and dematerialized and
offered for delivery etc.
SETTLEMENT
Futures contracts have two types of settlement, the MTM settlement which
happens on a continuous basis at the end of each day, and the final settlement
which happens on the last trading day of the futures contact. On the NCDEX, daily
MTM settlement and the final MTM settlement in respect of admitted deals in
futures contracts are cash settled by debiting/crediting account of CMs with the
respective clearing bank.
10
SX40
SX40 is the flagship Index of MCX-SXAT. A free float based
index of 40 large caps - liquid stocks representing diversified
sectors of the economy. It is designed to be a performance
benchmark and to provide for efficient investment and risk
management instrument. It would also help in structuring
passive investment vehicles.
Products
MCX-SXAT currently Rupee (EURINR), Pound Sterling-Indian Rupee (GBPINR)
and Japanese Yen-Indian Rupee (JPYINR). The currency futures contracts on
MCX-SX enable Indian Importers, Exporters, Corporate, Banks and other
participants to effectively hedge their risks arising out of volatile currency prices.
These contracts also offer a better flexibility than the currency contracts traded on
11
13
DEPOSITORY SERVICES
ONLINE SERVICES
TECHNICAL RESEARCH
COMMODITIES TRADING
FUNDAMENTAL
RESEARCH
DIAL-N- TRADE
SHAR
E
PORTFOLIO MANAGEMENT
14
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or om
M
E Cm
. pm
T
C
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r PM
eC as hahn anawPpag age lrneramer rai ra
H He ea ad d o of f t ht he e i ni nd du us ts rt ir ai al lu un ni ti t
E Em mp pl ol oy ye ee es s
FIGURE NO 3.2: Organizational structure of the company
F. ADDRESS OF THE COMPANY:
C9 Financial Pvt. Ltd.
2, Nilanjali Complex,
Near Gail Tower,
Anand-Mahal Road,
Surat-395009
G. CONTACT DETAILS OF THE COMPANY:
Phone: +91-261-3075054
Email: C9financial@gmail.com
Visit :www.C9financial.weebly.com
WHAT IS COMMODITY?
15
nonmaterials are emerging from carrying premium profit margins for market
participants to a status of commoditization.
Main Exchange
Contract
Size
Corn
CBOT
5000 bu
Corn
EURONEXT
50 tons
Oats
CBOT
5000 bu
Rough Rice
Soybeans
Rapeseed
CBOT
CBOT
EURONEXT
Soybean Meal
CBOT
2000 cwt
5000 bu
50 tons
100 short
Soybean Oil
CBOT
60,000 lb
Wheat
CBOT
5000 bu
Milk
Cocoa
Coffee C
Cotton No.2
Sugar No.11
Sugar No.14
Frozen Concentrated
Orange Juice
Chicago Mercantile
Exchange
ICE
ICE
ICE
ICE
ICE
ICE
tons
Trading Symbol
C/ZC
(Electronic)
EMA
O/ZO
(Electronic)
RR
S/ZS (Electronic)
ECO
SM/ZM
(Electronic)
BO/ZL
(Electronic)
W/ZW
(Electronic)
200,000 lbs DC
10 tons
37,500 lb
50,000 lb
112,000 lb
112,000 lb
CC
KC
CT
SB
SE
15,000 lbs
FCOJ-A
40,000 lb (20
tons)
40,000 lb (20
tons)
50,000 lb (25
tons)
USD ($)
USD ($)
USD ($)
Trading
Main Exchange
Chicago Mercantile
Symbol
LH
Exchange
Chicago Mercantile
LC
Exchange
Chicago Mercantile
FC
Exchange
Energy
Table: 4.3: Energy
Commodity
Brent Crude
Main
Exchange
NYMEX,
ICE
ICE
Ethanol
CBOT
Natural gas
NYMEX
Heating Oil
NYMEX
CL (NYMEX),
WTI (ICE)
(42,000 U.S.
gal)
29,000 U.S.
AC (Open Auction)
gal
10,000
mmBTU
1000 bbl
(42,000 U.S.
ZE (Electronic)
NG
HO
gal)
1000 bbl
Gulf Coast Gasoline
NYMEX
(42,000 U.S.
LR
NYMEX
gal)
1000 bbl
RB
(42,000 U.S.
18
Commodity
Main
Exchange
blending)
Propane
NYMEX
(42,000 U.S.
PN
gal)
5 Tons
TA
Precious metals
Table: 4.4: Precious metals
Commodity
Gold
Platinum
Palladium
Silver
Unit
troy ounce
troy ounce
troy ounce
troy ounce
Currency
USD ($)
USD ($)
USD ($)
USD ($)
Main Exchange
COMEX
COMEX
COMEX
COMEX
Industrial metals
Table: 4.5: Industrial metals
Commodity
Copper
Lead
Zinc
Tin
Aluminum
Aluminum alloy
Nickel
Cobalt
Molybdenum
Recycledsteel
Unit
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Metric Ton
Currency
USD ($)
USD ($)
USD ($)
USD ($)
USD ($)
USD ($)
USD ($)
USD ($)
USD ($)
USD ($)
Main Exchange
London Metal Exchange, New York
London Metal Exchange
London Metal Exchange
London Metal Exchange
London Metal Exchange, New York
London Metal Exchange
London Metal Exchange
London Metal Exchange
London Metal Exchange.,
Rotterdam
19
Other
Table: 4.6: Other
Commodity
Unit
Rubber
1 kg
Palm Oil
1000 kg
Wool
Polypropylene
Linear Low Density
Polyethylene (LL)
Currency
US cents ()
Malaysian Ringgit
(RM)
1 kg
AUD ($)
1000 kg USD ($)
1000 kg USD ($)
Bourse
*Singapore Commodity
Exchange
Bursa Malaysia
ASX
London Metal Exchange
London Metal Exchange
assets,
many
commodities
have
pronounced
The economic function of corporate securities such as stocks and bonds, that is,
liabilities of firms, is to raise external resources for the firm. Investors are bearing
the risk that the future cash flows of the firm may be low and may occur
during bad times, like recessions. These claims represent the discounted value
of cash flows over very long horizons. Their value depends on decisions of
management.
Rather,
commodity futures allow firms to obtain insurance for the future value of their
outputs (or inputs).
Hedging:
The hedger is a trader who enters the futures market in order to reduce a preexisting risk position. Having a position does not mean that the trader must
actually own a commodity. An individual or a firm who anticipates the need for a
certain commodity in the future or a person who plans to acquire a certain
commodity later also has a position in that commodity. In many cases, the hedger
has a certain hedging horizon the future date when the hedge will terminate. The
hedge can be a long hedge or a short hedge. If the hedger buys futures contract to
hedge, it will be a long hedge.
22
For example, a roller flourmill owner may like to lock-in the price of the wheat
that he wants to purchase three months later by purchasing wheat futures. If three
months later the wheat prices rise, carrying futures prices along with them, the
flourmill owner will purchase wheat from the spot market at a higher price. The
loss that he may suffer in the cash market will be compensated by sale of futures at
a higher price. Similarly, a farmer can sell three-month futures at the prevailing
price and lock-in his profits at that level. If the prices fall, the loss suffered by the
farmer in the cash market will be compensated by the profit that the farmer will
earn by squaring the transaction in the futures market.
In practice, hedging solutions are not as neat as the ones described above. In the
above example, the goods in question were exactly the same both in the cash and
the futures market, the amounts purchased / sold in the cash market matched the
futures contract amounts, and the hedging horizons of the farmer and the mill
owner matched the delivery dates of the futures contracts. It will be rare for all
factors to match perfectly; they will differ in time span covered, the amount of
commodity or the physical characteristics of the commodity that are traded in the
cash and the futures markets. Such hedges are known as cross-hedges. In such
cases, the hedger must trade the right number and kind of futures contract to
control the risk in hedged positions as much as possible. There can be situations
where the hedger does not have any definite hedging horizon and may enter into
what is known as risk-minimizing hedge.
The hedger has many incentives. Tax is a major incentive. In an un-hedged
situation, the profits fluctuate widely and the person / firm may have to pay taxes
in the high profit years while he is not able to utilize the tax credits when he runs
into losses. Hedging also serves to minimize the cost of financial distress. Widely
fluctuating profits may drive many persons / firms to bankruptcy. In an idealized
world with no transaction costs, which is inhabited by homo-economics this may
not be a factor. In the real world, bankruptcy involves avoidable human misery and
prolonged winding up procedures.
Role of Speculators:
Derivative markets have long been viewed with suspicion as speculators are the
most visible players. We consider it appropriate to emphasize that functioning
23
derivative markets will have speculators who need to be viewed from the point of
view of their economic usefulness and who need to be regulated with a view to
preventing systemic instability.
A speculator is a trader who enters the futures market in search of profit and, by so
doing, willingly accepts increased risks. Different types of speculators may be
categorized by the length of time they plan to hold a position. Traditionally, there
are three kinds of speculators: scalpers, day traders and position traders.
Scalpers time horizon is the shortest, ranging from the next few seconds to the
next few minutes and they make profits that may be only one or two ticks, the
minimum allowable price movement. If the prices do not move in the scalpers
direction within a few minutes of assuming a position, the scalper will like to close
the position and begin looking for a new opportunity. It is understood that scalpers
do not go by the demand and supply positions of the underlying commodity but act
on the sentiment.
They generate enormous amounts of transactions and are able to survive as they
pay minimum transaction cost. Besides earning profits for themselves, their main
role is to provide liquidity in the market. They provide a party willing to take the
opposite side of a trade for other traders; hedgers know that their orders can be
executed.
By actively trading, they generate price quotations thereby allowing markets to
discover prices more effectively. By competing for trades, they help close the bidask spread.
Day Traders close their position before the end of trading each day. Their strategy
is to guess the price movements on account of developments during the day,
including announcement of government policies and release of data. Position
Traders maintain overnight positions, which may run into weeks or even months.
They may hold outright positions in which they run huge risks and may also earn
big profits.
The more risk averse among them assume spread positions which may involve
relative price movements in different contracts on the same underlying
commodities or commodities which are closely related. It is pertinent to examine
24
25
Matching
Registration
Clearing
26
Limit
Notation
Margining
Price limits
Position limit
Clearing house
3. Settlement: At this stage the following is the system follows:
Marking to market
Receipts to payment
Reporting
Delivery upon expiration or maturity.
27
Gold (also called bullion) is primarily a monetary asset and partly a commodity. Gold is the
world's oldest international currency. It is an important element of global monetary reserves.
It is considered as a commodity as it can be acquired and stored in the form of Jewellery,
Bars, Coins and Gold Deposits. It is also called precious metal, which means it does not rust
(oxidise) at normal conditions. It is resistant against many acids and a good electric
conductor, which makes it useful for electronic circuits. It is useful for jewelry because of
its inertness.
Economic Importance
Gold has mainly three types of uses- Jewelery Demand, Investment Demand and
Industrial uses
Medium of monetary exchange
It is an important element of global monetary reserves.
It is an effective portfolio diversifier.
Global Scenario
South Africa, the United States and Australia are the three largest gold producing countries.
Other major producers are Canada, China, Indonesia, and Russia. However in recent years,
China has become the worlds largest producer of gold, overtaking South Africas top
position in 2007.
Turkey has become an important net exporter. Vietnam, usually a large buyer; and Thailand
are also exporting gold now. Demand for gold is widely spread around the world. East Asia,
28
the Indian sub-continent and the Middle East accounted for 72% of world demand in 2007.
55% of demand is attributable to just five countries - India, Italy, Turkey, USA and China.
India is the worlds largest gold consumer, followed by China.
Domestic Scenario
India is arguably the largest bullion market in the world. It has been until now, the
undisputed single-largest Gold bullion consumer. In spite of being the largest consumer of
gold, India plays no major role globally in influencing this precious metal's pricing. Gold
production in India is very low. Karnataka, Jharkhand and Gujarat produce small quantity of
Gold. There is a huge mismatch between demand and primary supply in India, the balance
being made up by imports. India imports around 500-80every year.
Silver
Silver (Chemical symbol Ag) is a brilliant grey-white metal that is quite soft and malleable. Silver
is unique amongst metals due to the fact that it can be classified as both a precious metal and an
industrial metal. Silver has a number of unique properties including its strength, malleability and
ductility, its sensitivity to and high reflectance of light and the ability to endure extreme
temperature ranges. Its combination of unique properties makes it exceptional amongst metals
and difficult to substitute. The main source of silver is in lead ore, although it can also be found
associated with copper, zinc and gold and produced as a by-product of base metal mining
activities.
29
Economic Importance
Silver is sought as valuable and practical industrial commodity.
The four main uses of Silver are industrial, photography, silverware & jewelry and coins &
medals production.
Global Scenario
Peru is the world's biggest silver mining country with 3,557,000 tonnes of silver, accounting for
17% of total mined silver production. Other major silver mining countries are Mexico, China,
Chile and Australia. Mexico and Peru are very old silvers country (since 1500), and their silvers
production remains among the top five nations of silver for decades, even centuries.
Domestic Scenario
India hardly produces any silver and is basically a silver importing country. The country is one of
the largest importers of the white metal in the world. The three major silver producing states in
India are Rajasthan, Gujarat & Jharkhand. Rajasthan is the leading silver producing state in India.
Silver supply comes 77.1 % from imports, 18.8 % from secondary silver and 2.5% from
Hindustan Zinc. Hindrance too shares about 1.7% of market.
30
Copper
Copper, also known as Cu, is one of the oldest elements. It is reddish with a bright metallic
lustre colored solid. Copper occurs naturally in the Earths crust in a variety of forms. It can
be found in sulfide deposits, carbonate deposits, in silicate deposits and as pure Native
copper. From these, copper is obtained by smelting, leaching, and electrolysis. 80% of copper
cathodes outputs are refined from the sulfide concentrate, though the copper content is only 23%.
Economic importance
Copper is ductile, corrosion resistant, malleable and an excellent conductor of heat and
electricity.
It is very durable metal.
It has major applications in electrical and construction industries.
Global Scenario
Chile remains by far the largest mine producer of copper in the world. However, China is the
biggest producer of refined copper in the world closely followed by Chile. Other major
copper producing countries are Peru, Australia, Indonesia, Russia, China, Canada, Zambia
and Poland. In terms of consumption, Asia consumes over half of the world copper. China is
the single largest consumer with about 25% of the total global demand.
Domestic Scenario
31
India accounts for 3 percent of the global copper output. The annual production of copper is
approx. 708,000 tons in 2008. India is largely dependent in import of raw material to
manufacture copper and involved in importing copper ores and extracts copper out of them.
However, small quantities of copper that are produced in India are extracted from the copper
mines situated at Khetri and Malanjkhand in the country.
Nickel
Major Characteristics:
32
Global Scenario:
More than 54%, if world total supply comes from only five companies.
With the growth in the stainless steel sector. Nickel import demand is
expected to increase in coming years.
33
> 5 2.5%
2%
2% 21.9% 76%
Crude oil
Crude oil is a mixture of hydrocarbons that exists in a liquid phase in natural underground
reservoirs. Crude oil is the most important energy carrier at a global scale and since all kinds
of transport rely heavily on oil, the future availability of crude oil is of paramount interest.
Crude oil is classified by the location of its origin (e.g. West Texas Intermediate, WT or Brent)
and often by its relative weight or viscosity (light, intermediate or heavy).
Economic importance
Worlds primary energy consumption is supplied by crude oil.
34
Crude oil is used as diesel fuel (petrol-diesel), fuel oils, gasoline (petrol), jet fuel,
kerosene and liquefied petroleum gas (LPG).
Transport relies to well over 90 percent on oil.
Global Scenario
Saudi Arabia, Russia and United States are the top three crude oil producing countries in the
world. OPEC countries account for more than three quarters of oil reserves in the world.
OPEC has great influence on the world crude oil market. Saudi Arabia is also the major
exporter of crude oil followed by Russia, Iran, UAE and Nigeria. Among major consumers of
crude oil, the US tops the list followed by China, Japan, USSR and India.
Domestic Scenario
India reserves second highest crude oil deposits in Asia-Pacific after China. It is the sixth
largest consumer of crude oil in the world with about 70% of its local requirement met through
imports. The country consumed average of about 2.7 million barrels per day during 2006 and
2008. The country currently stands at third largest importer of crude oil in the world.
Currently, state-owned Oil and Natural Gas Corporation Ltd is the biggest producer of crude
oil (largely from the Mumbai High offshore fields).
Dollar
On 15 January 1520, the kingdom of Bohemia began minting coins from silver
mined locally in Joachimsthal. The coins were called "Joachimsthaler," which
became shortened in common usage to thaler or taler. The German name
35
Joachimsthal literally means Joachim's valley or Joachim's dale. This name found
its way into other languages: Czech tolar, Hungarian tallr, Danish and Norwegian
(rigs) daler, Swedish (riks) daler, Icelandic dalur, Dutch (rijks)daalder or daler,
Ethiopian ("talari"), Italian tallero, Flemish daelder, Polish Talar, Persian Dare, as
well as - via Dutch - into English as dollar.
A later Dutch coin depicting a lion was called the leeuwendaler or leeuwendaalder,
literally 'lion dealer'. The Dutch Republic produced these coins to accommodate its
booming international trade. The leeuwendaler circulated throughout the Middle
East and was imitated in several German and Italian cities. This coin was also
popular in the Dutch East Indies and in the Dutch New Netherland Colony (New
York). It was in circulation throughout the Thirteen Colonies during the 17th and
early 18th centuries and was popularly known as lion (or Lyon) dollar. The modern
American-English pronunciation of dollar is still remarkably close to the 17th
century Dutch pronunciation of dealer. Some well-worn examples circulating in
the Colonies were known as "dog dollars".
Spanish pesos - having the same weight and shape - came to be known as Spanish
dollars. By the mid-18th century, the lion dollar had been replaced by Spanish
dollar, the famous "piece of eight", which was distributed widely in the Spanish
colonies in the New World and in the Philippines.
CORRELATION:
If the change in values of two variables are simultaneous and when the changes in
one are due to changes in other, the variable are said to be correlation.
x
2
2
n ( y )
n ( x2 )
n xy( x)( y )
r=
36
Correlation coefficient r
The correlation coefficient r is a measure of the linear relationship between two
attributes or columns of data. The correlation coefficient is also known as the
person product moment correlation coefficient. The value of r can range from -1 to
+1 and is independent of the unit of measurement. A value of r near 0 indicates
little correlation between attributes, a value near +1 0r -1 indicates a high level of
correlation.
Interpretation or r:
The value of the correlation of coefficient always lies between -1 to +1. The
interpretation of the value of r is given below:
Value of r is positive implies that there is positives correlation between the
variable.
When r =1, it means there is perfect positive correlation between the variable.
When r is negative it means there is negative correlation between the variable.
When r = -1, it means there is perfect negative correlation between the variable.
When r = 0, it means there is no correlation.
Types of correlation
Positive correlation:
If x and y have a strong positive linear correlation, r is close to +1. An r value of
exactly +1 indicates a perfect positive fit. Positive value indicates a relationship
between x and y variable such that as values for x increases, value for y also
increases.
Negative correlation:
If x and y have a strong negative linear correlation, r is close to -1. An r value of
exactly -1 indicates a perfect negative fit. Negative value syndicates a relationship
between x and y such that as values for x increases, value for y also decreases.
No correlation:
If there is no linear correlation or a weak linear correlation, r is close to 0. A value
near zero means that there is a random, nonlinear relationship between the two
variables. Note, that r is a dimensionless quantity, it does not depend on the units
employed.
A perfect correlation of
straight line. If r = +1, the slope of this line is positive. If r = -1, the slope of this
37
n x 2
x xy x y
=
RESEARCH:
Research always starts with problem, its purpose to find the answer of the
question with application of scientific method, it is systematic and intensive study
directed towards more complex knowledge of the subject studied.
RESEARCH METHODOLOGY:
The system of collecting data for research projects is known as methodology. The
data may be collected for either theoretical or practical research for example
management research may be strategically conceptualized along with operational
planning methods and change management.
1) MAIN OBJECTIVE:
To analyze impact of dollar on price of different commodities.
2) SUBSIDERY OBJECTIVE:
38
To find out the correlation between dollar and price of different commodities.
To find out risk between dollar and price of different commodities on the
basis of beta.
To analysis price fluctuation on the basis of graph to represent its affects.
Research plan:
RESEARCH DESIGN:
The research design is the method and process for the conducting particular
study. Broadly speaking, it is can be grouped in the three main categoryexploratory, descriptive, causal.
EXPLORATORY:
DESCRIPTIVE:
CAUSAL:
As the name implies a causal design investigates the cause and effect relationship
between two or more variable.
In this report as a research design the CAUSAL DESIGN is well suitable, because
a whole report is based on to find out impact of exchange rate on IT sector equity
share prices.
SOURCES OF DATA:
SOURCES OF DATA:
In the research it is very important to determine the research had collected primary
data or secondary data. Sometimes, the research study is based on both data.
The source of data can be divided in the two categories.
39
a) Primary data:
The primary data are those data which are collected by the any researcher first
time and before it no one have collected those data is known as the primary data.
b) Secondary data:
The secondary data are those which are already collected and used for some other
context.
This report is based on secondry data. Here, data is collected from MCX and
MCX-SX web-sites from internet and MCX annual report.
SAMPLING SIZE:
Monthly closing price of exchange rate (USD-INR) from 2009 to 2013.
Monthly closing price of selected commodities from 2009 to 2013.
Sampling design
A) Probability
Probability of every unit in the population being included in the sample size
is known. There are four types of this method:
a) Sample random sampling
b) Systematic sampling
c) Stratified sampling
d) Cluster sampling
B) Non probability
There aer foue thpes of this method:
a) Convenience sampling
b) Judgments sampling
c) Quota sampling
d) Snowballs sampling
40
Limitation of study
That their can be some limitations in this report that may be due to
knowledge level or some other factors which are as follow.
The various sources utilized for this study, which include, website,
information from commodity takers, market watchers and
41
YEAR/
MONTH
Xi
USD/
Yi
GOLDS
X
%CHANGE
Y
%CHANGE
9-Jan
9-Feb
9-Mar
9-Apr
9-May
9-Jun
9-Jul
9-Aug
9-Sep
9-Oct
9-Nov
9-Dec
10-Jan
10-Feb
10-Mar
10-Apr
INR
(Rs.)
49.02
50.73
50.95
50.22
47.29
47.87
48.16
48.88
48.04
46.96
46.48
46.68
46.37
46.23
45.14
44.44
PRICE
(Rs.)
14276
15216
15066
14220
14845
14558
14680
15160
15020
15965
17650
16405
16230
16589
16300
17015
IN
USD/INR
0
3.48
0.43
-1.43
-5.83
1.22
0.60
1.49
-1.71
-2.24
-1.02
0.43
-0.66
-0.30
-2.35
-1.55
IN
GOLD
0
6.58
-0.98
-5.61
4.39
-1.93
0.83
3.26
-0.92
6.29
10.55
-7.05
-1.06
2.21
-1.74
4.38
XY
X2
Y2
0
22.96
-0.42
8.04
-25.64
-2.37
0.50
4.88
1.58
-14.14
-10.78
-3.03
0.70
-0.66
4.10
-6.80
0
12.16
0.18
2.05
34.03
1.50
0.36
2.23
2.95
5.05
1.04
0.18
0.44
0.09
5.55
2.40
0
43.35
0.97
31.53
19.31
3.73
0.70
10.69
0.85
39.58
111.38
49.75
1.137
4.89
3.03
19.24
42
10-May
10-Jun
10-Jul
10-Aug
10-Sep
10-Oct
10-Nov
10-Dec
11-Jan
11-Feb
11-Mar
11-Apr
11-May
11-Jun
11-Jul
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
12-Jan
12-Feb
12-Mar
12-Apr
12-May
12-Jun
12-Jul
12-Aug
12-Sep
12-Oct
12-Nov
12-Dec
13-Jan
13-Feb
13-Mar
13-Apr
13-May
13-Jun
13-Jul
13-Aug
13-Sep
13-Oct
46.45
46.6
46.46
47.08
44.92
44.54
46.04
44.81
45.95
45.18
44.65
44.38
45.03
44.72
44.15
46.02
48.92
48.87
52.17
53.27
49.15
49.37
50.75
52.28
56.1
55.8
55.65
55.85
52.27
53.92
54.17
54.96
54.31
53.77
54.4
54.37
55.01
58.39
59.77
63.2
63.75
61.61
18177
18105
17768
18220
19165
19680
20100
20575
19620
20800
20360
22715
22105
21041
23211
26761
25351
27201
28441
27170
28117
28047
28010
29156
29152
29661
29835
31161
31223
31143
31150
30763
30727
30270
29951
27705
26815
27270
26912
30161
30673
29584
4.52
0.32
-0.30
1.33
-4.58
-0.84
3.36
-2.67
2.54
-1.64
-1.17
-0.60
1.46
-0.68
-1.27
4.23
6.30
-0.10
6.75
2.10
-7.73
0.44
2.79
3.01
7.30
-0.53
-0.26
0.35
-6.41
3.15
0.46
1.45
-1.18
-0.95
1.17
-0.05
1.17
6.14
2.36
5.73
0.87
-3.35
6.82
-0.39
-1.86
2.54
5.18
2.68
2.13
2.36
-4.64
6.01
-2.11
11.56
-2.68
-4.81
10.31
15.29
-5.26
7.29
4.55
-4.46
3.48
-0.24
-0.13
4.09
-0.01
1.74
0.58
4.44
0.19
-0.25
0.02
-1.24
-0.11
-1.49
-1.05
-7.49
-3.21
1.69
-1.31
12.08
1.69
-3.55
30.88
-0.12
0.55
3.39
-23.79
-2.27
7.18
-6.31
-11.80
-10.07
2.48
-6.99
-3.93
3.31
-13.14
64.78
-33.20
-0.74
30.78
-9.42
-26.95
-0.11
-0.36
12.33
-0.10
-0.93
-0.15
1.59
-1.27
-0.80
0.01
-1.81
0.13
1.47
-1.23
0.41
-3.78
10.42
-3.10
69.28
1.47
11.99
20.45
0.10
0.09
1.78
21.04
0.71
11.34
7.13
6.47
2.80
1.37
0.36
2.14
0.47
1.68
17.93
39.71
0.01
45.59
4.44
59.81
0.20
7.81
9.08
53.38
0.28
0.07
0.12
41.08
9.96
0.21
2.12
1.39
0.98
1.37
0.03
1.38
37.75
5.58
32.93
0.75
11.26
46.63
0.15
3.46
6.47
26.90
7.22
4.55
5.58
21.54
36.17
4.47
133.79
7.21
23.16
106.34
233.92
27.76
53.25
20.78
19.97
12.14
0.06
0.017
16.73
0.0001
3.04
0.34
19.75
0.03
0.06
0.0005
1.54
0.01
2.21
1.11
56.23
10.31
2.87
1.72
145.7
2.88
12.60
43
13-Nov
13-Dec
62.68
61.9
29989
30120
1.73
-1.24
1.36
0.43
26.091
81.478
2.37
-0.54
70.746
3.01
1.54
538.13
1.87
0.19
1421.16
Xi = USD/INR
Yi = GOLDS PRICE
X = % CHANGE IN USD/INR
Y = % CHANGE IN GOLDS PRICE
n = 59
n xy( x )( y )
r=
( n ( x )( x ) )( n ( y )( y ) )
2
= 0.41
n xy x y
2
n x2( x )
= 0.06
Interpretation:
The above table 6.1 calculations in correlation & regression and beta are as:
1. The magnitude of the correlation for the time period of JAN-2009 to DEC2013 between USD/INR and golds price is = 0.41
2. This indicates that USD/INR and price of gold are related to one another in
a positive manner. That means appreciation in USD/INR leads to rise in
golds price and vice-versa.
44
Xi
USD/
9-Jan
9-Feb
9-Mar
9-Apr
9-May
9-Jun
9-Jul
9-Aug
9-Sep
9-Oct
9-Nov
9-Dec
10-Jan
10-Feb
10-Mar
10-Apr
10-May
10-Jun
10-Jul
INR
(Rs.)
49.02
50.73
50.95
50.22
47.29
47.87
48.16
48.88
48.04
46.96
46.48
46.68
46.37
46.23
45.14
44.44
46.45
46.6
46.46
Yi
SILVER
S
PRICE
(Rs.)
19682
21709
21890
20884
23205
22357
22155
23575
26040
25999
28250
26870
25500
25839
26875
28235
29263
29575
28644
X
Y
%CHANGE %CHANGE
IN
USD/INR
IN
SILVER
0
3.48
0.43
-1.43
-5.83
1.22
0.60
1.49
-1.71
-2.24
-1.02
0.43
-0.66
-0.30
-2.35
-1.55
4.52
0.32
-0.30
0
10.29
0.83
-4.59
11.11
-3.65
-0.90
6.40
10.45
-0.15
8.65
-4.88
-5.09
1.32
4.00
5.06
3.64
1.06
-3.14
XY
X2
Y2
0
12.16
0.18
2.05
34.03
1.59
0.36
2.23
2.95
5.05
1.05
0.18
0.44
0.09
5.58
2.40
20.45
0.10
0.090
35.92
0.36
6.58
-64.84
-4.48
-0.54
9.58
-17.96
0.35
-8.84
-2.10
3.38
-0.40
-9.45
-7.84
16.46
0.34
0.94
106.06
0.69
21.12
123.51
13.35
0.81
41.08
109.32
0.024
74.96
23.86
25.99
1.76
16.07
25.60
13.25
1.13
9.90
45
10-Aug
10-Sep
10-Oct
10-Nov
10-Dec
11-Jan
11-Feb
11-Mar
11-Apr
11-May
11-Jun
11-Jul
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
12-Jan
12-Feb
12-Mar
12-Apr
12-May
12-Jun
12-Jul
12-Aug
12-Sep
12-Oct
12-Nov
12-Dec
13-Jan
13-Feb
13-Mar
13-Apr
13-May
13-Jun
13-Jul
13-Aug
13-Sep
13-Oct
13-Nov
13-Dec
47.08
44.92
44.54
46.04
44.81
45.95
45.18
44.65
44.38
45.03
44.72
44.15
46.02
48.92
48.87
52.17
53.27
49.15
49.37
50.75
52.28
56.1
55.8
55.65
55.85
52.27
53.92
54.17
54.96
54.31
53.77
54.4
54.37
55.01
58.39
59.77
63.2
63.75
61.61
62.68
61.9
30140
33350
37075
41805
46065
42950
49600
55900
70837
57910
51820
58218
61523
51469
56003
54505
50010
56423
58150
56783
55525
54257
52051
54025
58204
62819
59822
61693
57700
58699
57656
54481
47344
44084
42704
41686
49556
51567
48716
49112
50212
1.33
-4.58
-0.84
3.36
-2.67
2.54
-1.67
-1.17
-0.60
1.46
-0.68
-1.27
4.23
6.30
-0.102
6.75
2.10
-7.73
0.44
2.79
3.01
7.30
-0.53
-0.26
0.35
-6.41
3.15
0.46
1.45
-1.18
-0.99
1.17
-0.05
1.17
6.14
2.36
5.738
0.87
-3.35
1.73
-1.24
26.003
5.22
10.65
11.16
12.75
10.19
-6.76
15.48
12.70
26.720
-18.24
-10.51
12.34
5.67
-16.39
8.80
-2.67
-8.24
12.82
3.06
-2.35
-2.21
-2.28
-4.06
3.79
7.735
7.92
-4.77
3.19
-6.47
1.73
-1.77
-5.50
-13.09
-6.88
-3.13
-2.38
18.87
4.05
-5.52
0.81
2.23
115.089
6.96
-48.86
-9.44
42.99
-27.22
-17.20
-25.94
-14.90
-16.15
-26.72
7.23
-15.73
24.04
-102.97
-0.900
-18.06
-17.38
-99.17
1.37
-6.57
-6.67
-16.68
2.17
-1.01
2.77
-50.82
-15.06
1.45
-9.43
-2.04
1.76
-6.45
0.72
-8.10
-19.23
-5.63
108.341
3.51
18.55
1.41
-2.78
-410.47
1.78
21.04
0.71
11.34
7.13
6.47
2.80
1.37
0.36
2.19
0.47
1.62
17.93
39.71
0.01
45.59
4.44
59.81
0.20
7.81
9.08
53.38
0.28
0.07
0.12
41.08
9.96
0.21
2.12
1.39
0.98
1.37
0.003
1.38
37.75
5.58
32.93
0.75
11.26
3.017
1.54
538.13
27.27
113.40
124.75
162.76
103.83
45.72
239.72
161.33
714.00
333.02
110.59
152.43
32.22
267.05
77.60
7.15
68.01
164.44
9.36
5.52
4.90
5.26
16.53
14.38
59.83
62.86
22.76
9.78
41.89
2.99
3.15
30.32
171.60
47.41
9.79
5.68
356.42
16.409
30.56
0.66
5.01
4447.1
46
Xi = USD/INR
Yi = SILVERS PRICE
X = % CHANGE IN USD/INR
Y = % CHANGE IN SILVERS PRICE
n = 59
n xy( x )( y )
r=
( n ( x )( x ) )( n ( y )( y ) )
2
= -0.30
n xy x y
2
n x2( x )
= -0.087
Interpretation:
The above table 6.3 calculations in correlation & regression and beta are as:
1. The magnitude of the correlation for the time period of JAN-2009 to DEC2013 between USD/INR and silvers price is = -0.30
2. This indicates that USD/INR and price of silver are related to one another in a
positive manner. That means appreciation in USD/INR leads to rise in golds
price and vice-versa.
3. Here, beta is -0.087 that indicates that if USD/INR appreciates by is reflected
by 0.087 price decrease in silver.
47
Xi
USD/
9-Jan
9-Feb
9-Mar
9-Apr
9-May
9-Jun
9-Jul
9-Aug
9-Sep
9-Oct
9-Nov
9-Dec
10-Jan
10-Feb
10-Mar
10-Apr
10-May
10-Jun
10-Jul
10-Aug
10-Sep
10-Oct
10-Nov
INR
(Rs.)
49.02
50.73
50.95
50.22
47.29
47.87
48.16
48.88
48.04
46.96
46.48
46.68
46.37
46.23
45.14
44.44
46.45
46.6
46.46
47.08
44.92
44.54
46.04
Yi
X
Y
COPPERS %CHANGE %CHANGE
PRICE
(Rs.)
158.7
170.65
198.85
213.05
229.1
245.75
274.1
314.9
289.05
306
319.25
344.6
312.05
333.1
353.05
327.55
318.55
299
339.2
347.4
362.6
366.6
379.55
IN
USD/INR
0
3.48
0.43
-1.43
-5.88
1.22
0.60
1.49
-1.71
-2.24
-1.02
0.43
-0.66
-0.30
-2.35
-1.55
4.52
0.32
-0.30
1.33
-4.58
-0.84
3.36
XY
X2
Y2
0
26.26
7.16
-10.23
-43.95
8.91
6.98
22.25
14.10
-13.18
-4.42
3.41
6.27
-2.03
-14.12
11.20
-12.42
-1.98
-4.03
3.22
-20.07
-0.93
11.89
0
12.16
0.18
2.052
34.03
1.50
0.36
2.23
2.95
5.05
1.04
0.18
0.44
0.09
5.55
2.40
20.45
0.10
0.09
1.78
21.04
0.71
11.34
0
56.69
273.07
50.99
56.75
52.81
133.08
221.56
67.38
34.38
18.74
63.05
89.22
45.50
35.87
52.16
7.54
37.66
180.76
5.84
19.14
1.21
12.47
IN
COPPER
0
7.52
16.52
7.14
7.53
7.26
11.53
14.88
-8.20
5.86
4.33
7.94
-9.44
6.74
5.98
-7.22
-2.74
-6.13
13.44
2.41
4.37
1.10
3.53
48
10-Dec
11-Jan
11-Feb
11-Mar
11-Apr
11-May
11-Jun
11-Jul
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
12-Jan
12-Feb
12-Mar
12-Apr
12-May
12-Jun
12-Jul
12-Aug
12-Sep
12-Oct
12-Nov
12-Dec
13-Jan
13-Feb
13-Mar
13-Apr
13-May
13-Jun
13-Jul
13-Aug
13-Sep
13-Oct
13-Nov
13-Dec
44.81
45.95
45.18
44.65
44.38
45.03
44.72
44.15
46.02
48.92
48.87
52.17
53.27
49.15
49.37
50.75
52.28
56.1
55.8
55.65
55.85
52.27
53.92
54.17
54.96
54.31
53.77
54.4
54.37
55.01
58.39
59.77
63.2
63.75
61.61
62.68
61.9
431.85
440.95
413.7
421.85
407.55
417.25
417.05
436.05
418.3
350.1
398.9
386.5
403.5
417.15
417.7
431.65
443.9
428.85
429.4
422.55
424.3
441.05
419.7
436.05
443.75
442.95
438.53
422.23
394.44
407.64
415.44
422.67
465.05
469.19
450.44
451.46
452.3
-2.67
2.54
-1.67
-1.17
-0.60
1.46
-0.68
-1.29
4.23
6.30
-0.10
6.75
2.10
-7.73
0.44
2.79
3.01
7.30
-0.534
-0.26
0.35
-6.41
3.15
0.46
1.45
-1.18
-0.99
1.17
-0.05
1.17
6.14
2.36
5.73
0.87
-3.35
1.73
-1.24
13.79
2.10
-6.17
1.97
-3.38
2.38
-0.047
4.55
-4.07
-16.30
13.93
-3.10
4.39
3.38
0.13
3.33
2.83
-3.39
0.12
-1.50
0.41
3.94
-4.84
3.89
1.76
-0.18
-0.99
-3.71
-6.58
3.34
1.91
1.74
10.02
0.89
-3.99
0.22
0.18
26.003
117.302
-36.81
5.36
10.35
-2.31
2.04
3.48
0.032
-5.80
-17.24
-102.78
-1.42
-20.99
9.27
-26.16
0.05
9.33
8.55
-24.77
-0.06
0.42
0.14
-25.30
-15.28
1.80
2.57
0.21
0.99
-4.35
0.36
3.93
11.75
4.11
57.54
0.77
13.41
0.39
-0.23
-142.235
7.13
6.47
2.80
1.37
0.36
2.14
0.47
1.62
17.93
39.71
0.019
45.59
4.44
59.81
0.20
7.81
9.08
53.38
0.28
0.07
0.12
41.08
9.96
0.21
2.12
1.39
0.98
1.37
0.003
1.38
37.75
5.58
32.93
0.75
11.26
3.016
1.54
538.13
189.89
4.44
38.19
3.88
11.49
5.66
0.008
20.75
16.57
265.823
194.29
9.66
19.34
11.44
0.017
11.15
8.05
11.49
0.019
2.54
0.17
15.58
23.43
15.17
3.11
0.039
0.99
13.81
43.315
11.19
3.66
3.02
100.53
0.79
15.97
0.051
0.034
2591.62
Xi = USD/INR
Yi = COPPERS PRICE
49
X = % CHANGE IN USD/INR
Y = % CHANGE IN COPPERS PRICE
n = 59
n xy( x )( y )
r=
( n ( x )( x ) )( n ( y )( y ) )
2
n xy x y
2
n x2( x )
= -0.036
Interpretation:
The above table 6.2 calculations in correlation & regression and beta are as:
1. The magnitude of the correlation for the time period of JAN-2009 to DEC2012 between USD/INR and coppers price is = -0.17
2. This indicates that USD/INR and price of copper are related to one another in a
negative manner. That means appreciation in USD/INR leads to fall in coppers
price and vice-versa.
3. Here, beta is -0.036 that indicates that if USD/INR appreciates by is reflected
by 0.036 price decrease in copper.
50
Xi
USD/
INR
(Rs.)
9-Jan
9-Feb
9-Mar
9-Apr
9-May
9-Jun
9-Jul
9-Aug
9-Sep
9-Oct
9-Nov
9-Dec
10-Jan
10-Feb
10-Mar
10-Apr
10-May
10-Jun
10-Jul
10-Aug
10-Sep
10-Oct
10-Nov
10-Dec
11-Jan
11-Feb
11-Mar
49.02
50.73
50.95
50.22
47.29
47.87
48.16
48.88
48.04
46.96
46.48
46.68
46.37
46.23
45.14
44.44
46.45
46.6
46.46
47.08
44.92
44.54
46.04
44.81
45.95
45.18
44.65
Yi
X
Y
NICKEL %CHANGE %CHANGE
S
PRICE
IN
IN
(Rs.)
USD/INR
NICKEL
532.7
490.2
479.1
556.8
650.9
766.2
894.4
957.5
832.7
867
757
862.5
868.4
947.4
1125.7
1146.6
1003.1
905.3
955.1
974.9
1050.6
1010.5
1040.2
1118
1244
1302.8
1164.4
0
3.48
0.43
-1.43
-5.83
1.22
0.60
1.49
-1.71
-2.24
-1.02
0.43
-0.66
-0.301
-2.35
-1.55
4.52
0.32
-0.30
1.33
-4.58
-0.84
3.36
-2.67
2.54
-1.67
-1.17
0
-7.97
-2.26
16.21
16.9
17.71
16.73
7.05
-13.09
4.11
-12.68
13.93
0.68
9.09
18.81
1.85
-12.51
-9.78
5.50
2.073
7.76
-3.81
2.93
7.47
11.27
4.72
-10.23
XY
X2
Y2
0
-27.83
-0.98
-23.23
-98.60
21.72
10.13
10.54
22.39
-9.26
12.96
5.99
-0.414
-2.741
-44.37
-2.87
-56.60
-3.14
-1.65
2.76
-35.65
3.22
9.89
-19.98
28.67
-7.92
12.46
0
12.16
0.18
2.05
34.03
1.50
0.36
2.23
2.95
5.05
1.044
0.18
0.44
0.091
5.55
2.40
20.45
0.10
0.090
1.78
21.04
0.71
11.34
7.13
6.47
2.80
1.37
0
63.65
5.127
263.02
285.61
313.78
279.95
49.77
169.88
16.96
160.97
194.22
0.46
82.75
354.19
3.447
156.63
95.058
30.26
4.29
60.29
14.56
8.653
55.94
127.01
22.34
112.85
51
11-Apr
11-May
11-Jun
11-Jul
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
12-Jan
12-Feb
12-Mar
12-Apr
12-May
12-Jun
12-Jul
12-Aug
12-Sep
12-Oct
12-Nov
12-Dec
13-Jan
13-Feb
13-Mar
13-Apr
13-May
13-Jun
13-Jul
13-Aug
13-Sep
13-Oct
13-Nov
13-Dec
44.38
45.03
44.72
44.15
46.02
48.92
48.87
52.17
53.27
49.15
49.37
50.75
52.28
56.1
55.8
55.65
55.85
52.27
53.92
54.17
54.96
54.31
53.77
54.4
54.37
55.01
58.39
59.77
63.2
63.75
61.61
62.68
61.9
1179.5
1042.6
1033.6
1081.6
1014.6
895.5
939.5
883.3
973.6
1057
976.6
917.4
938.6
928.6
935.4
892
887
978.5
876.2
932.6
936.4
952.6
960.7
951.8
854.6
832.1
838.1
871
898.1
914.7
845
855.9
862.7
-0.60
1.46
-0.694
-1.27
4.23
6.30
-0.10
6.75
2.108
-7.73
0.44
2.79
3.033
7.30
-0.53
-0.26
0.35
-6.41
3.15
0.46
1.45
-1.18
-0.99
1.17
-0.055
1.177
6.14
2.36
5.73
0.87
-3.35
1.73
-1.24
1.29
-11.60
-0.86
4.64
-6.19
-11.73
4.91
-5.98
10.22
8.55
-7.60
-6.06
2.31
-1.04
0.73
-4.63
-0.56
10.31
-10.45
6.43
0.40
1.79
0.85
-0.92
-10.21
-2.63
0.72
3.92
3.11
1.84
-7.62
1.28
0.79
26.003
68.17
-0.78
-16.99
0.59
-5.91
-26.23
-73.97
-0.50
-40.39
21.55
-66.25
-3.40
-16.94
6.96
-7.78
-0.39
1.24
-0.20
-66.12
-33.007
2.98
0.59
-2.04
-0.845
-1.08
0.563
-3.09
4.43
9.27
17.85
1.60
25.57
2.249
-0.98
-465.97
0.36
2.14
0.473
1.67
17.93
39.71
0.010
45.59
4.44
59.81
0.20
7.81
9.088
53.38
0.28
0.07
0.12
41.08
9.96
0.214
2.12
1.39
0.98
1.37
0.003
1.38
37.75
5.58
32.93
0.75
11.26
3.01
1.54
538.13
1.68
134.71
0.745
21.09
38.37
137.79
24.14
35.78
104.51
73.37
57.85
36.74
5.34
1.13
0.53
21.52
0.31
106.41
109.30
41.43
0.16
2.99
0.72
0.85
104.28
6.93
0.51
15.40
9.68
3.41
58.06
1.66
0.63
4090.38
Xi = USD/INR
Yi = NICKELS PRICE
X = % CHANGE IN USD/INR
Y = % CHANGE IN NICKELS PRICE
52
n = 59
n xy( x )( y )
r=
( n ( x )( x ) )( n ( y )( y ) )
2
= -0.34
=
n xy x y
2
n x2( x )
= -0.09
Interpretation:
The above table 6.4 calculations in correlation & regression and beta are as:
1. The magnitude of the correlation for the time period of JAN-2009 to DEC2013 between USD/INR and nickels price is = -0.34
2. This indicates that USD/INR and price of nickel are related to one another
in a negative manner. That means appreciation in USD/INR leads to fall in
nickels price and vice-versa.
3. Here, beta is -0.09 that indicates that if USD/INR appreciates by is
reflected by 0.09 price decreases in nickel.
53
Xi
USD/
INR
(Rs.)
9-Jan
9-Feb
9-Mar
9-Apr
9-May
9-Jun
9-Jul
9-Aug
9-Sep
9-Oct
9-Nov
9-Dec
10-Jan
10-Feb
10-Mar
10-Apr
10-May
10-Jun
10-Jul
10-Aug
10-Sep
10-Oct
10-Nov
10-Dec
11-Jan
11-Feb
11-Mar
11-Apr
11-May
11-Jun
11-Jul
49.02
50.73
50.95
50.22
47.29
47.87
48.16
48.88
48.04
46.96
46.48
46.68
46.37
46.23
45.14
44.44
46.45
46.6
46.46
47.08
44.92
44.54
46.04
44.81
45.95
45.18
44.65
44.38
45.03
44.72
44.15
Yi
X
Y
CRUDE %CHANGE %CHANGE
OILS
PRICE
IN
IN
(Rs.)
USD/INR
CRUDE
OIL
2043
0
0
2271
3.48
11.16
2473
0.43
8.89
2540
-1.43
2.70
3136
-5.83
23.46
3403
1.22
8.51
3142
0.60
-7.66
3555
1.49
13.14
3205
-1.71
-9.84
3616
-2.24
12.82
3560
-1.02
-1.55
3726
0.43
4.66
3380
-0.66
-9.28
3683
-0.30
8.96
3768
-2.35
2.30
3816
-1.55
1.27
3436
4.52
-9.95
3559
0.32
3.57
3668
-0.30
3.06
3499
1.33
-4.60
3563
-4.58
1.82
3627
-0.84
1.79
3911
3.36
7.83
4034
-2.67
3.14
4086
2.54
1.28
4441
-1.67
8.68
4668
-1.17
5.11
5056
-0.604
8.31
4548
1.46
-10.04
4259
-0.68
-6.35
4226
-1.27
-0.77
XY
X2
Y2
0
38.93
3.85
-3.88
-136.90
10.44
-4.64
19.65
16.91
-28.82
1.58
2.006
6.16
-2.70
-5.44
-1.97
-45.03
1.15
-0.92
-6.14
-8.39
-1.51
26.37
-8.40
3.27
-14.55
-5.99
-5.02
-14.71
4.37
0.98
0
12.16
0.18
2.05
34.03
1.58
0.36
2.23
2.95
5.05
1.04
0.18
0.44
0.09
5.55
2.40
20.45
0.10
0.090
1.78
21.04
0.71
11.34
7.13
6.47
2.80
1.37
0.36
2.14
0.47
1.62
0
124.54
79.11
7.34
550.58
72.48
58.82
172.77
96.92
164.44
2.39
21.74
86.23
80.36
5.32
1.62
99.16
12.81
9.37
21.22
3.34
3.22
61.31
9.89
1.66
75.48
26.12
69.08
100.95
40.37
0.60
54
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
12-Jan
12-Feb
12-Mar
12-Apr
12-May
12-Jun
12-Jul
12-Aug
12-Sep
12-Oct
12-Nov
12-Dec
13-Jan
13-Feb
13-Mar
13-Apr
13-May
13-Jun
13-Jul
13-Aug
13-Sep
13-Oct
13-Nov
13-Dec
46.02
48.92
48.87
52.17
53.27
49.15
49.37
50.75
52.28
56.1
55.8
55.65
55.85
52.27
53.92
54.17
54.96
54.31
53.77
54.4
54.37
55.01
58.39
59.77
63.2
63.75
61.61
62.68
61.9
4091
4019
4556
5182
5264
4927
5227
5274
5514
5097
4695
4921
5358
4887
4666
4838
5015
5172
5153
5066
5003
5260
5611
6127
6885
6811
6226
6296
6381
4.239
6.30
-0.10
6.75
2.10
-7.73
0.44
2.79
3.01
7.30
-0.53
-0.26
0.35
-6.41
3.15
0.46
1.45
-1.182
-0.99
1.17
-0.05
1.17
6.14
2.36
5.73
0.87
-3.35
1.73
-1.24
26.003
-3.19
-1.76
13.36
13.74
1.58
-6.40
6.08
0.89
4.55
-7.59
-7.88
4.81
8.88
-8.79
-4.52
3.68
3.65
3.13
-0.36
-1.68
-1.24
5.13
6.67
9.19
12.37
-1.07
-8.58
1.12
1.35
129.634
-13.53
-11.09
-1.36
92.78
3.33
49.51
2.72
2.51
13.719
-55.25
4.21
-1.29
3.19
56.34
-14.27
1.70
5.33
-3.70
0.36
-1.97
0.06
6.04
41.00
21.73
70.99
-0.93
28.83
1.95
-1.68
141.902
17.93
39.71
0.010
45.59
4.44
59.81
0.20
7.81
9.08
53.38
0.28
0.072
0.12
41.08
9.96
0.21
2.12
1.39
0.98
1.3
0.003
1.38
37.75
5.58
32.93
0.75
11.26
3.01
1.54
538.13
10.20
3.097
178.53
188.79
2.50
40.9
37.07
0.80
20.70
57.19
62.20
23.17
78.85
77.27
20.45
13.58
13.38
9.80
0.134
2.85
1.54
26.38
44.52
84.57
153.05
1.15
73.77
1.26
1.82
3289.112
Xi = USD/INR
Yi = CRYDE OILS PRICE
X = % CHANGE IN USD/INR
Y = % CHANGE IN GOLDS PRICE
n = 59
55
n xy( x )( y )
r=
( n ( x )( x ) )( n ( y )( y ) )
2
= 0.06
n xy x y
2
n x2( x )
= 0.01
Interpretation:
The above table 6.5 calculations in correlation & regression and beta are as:
1. The magnitude of the correlation for the time period of JAN-2009 to DEC2013 between USD/INR and crude oils price is = 0.06
2. This indicates that USD/INR and price of crude oil are related to one
another in a negative manner. That means appreciation in USD/INR leads
to fall in crude oils price and vice-versa.
3. Here, beta is 0.01 that indicates that if USD/INR appreciates by is reflected
by 0.01 price increase in crude oil.
56
FINDINGS
The study carried out under the title of An analysis of impact of dollar on prices
of different commodities following point are found.
It is found that the relation between Dollar and Golds price through the
correlation function, there is positive relationship between them and also
found the systematic risk between Dollar-Golds by using beta which is as
follows.
Correlation
Beta
0.41
0.06
Beta
-0.3
-0.08
-0.17
-0.03
-0.34
-0.09
57
-0.06
-0.01
Here, form above table-7.2, the correlation between USD/INR and Nickels
price is more negative as compare to other non-precious and the systematic
risk in Dollar-Copper is higher as compare to non-precious metals which
are above in table.
58
CONCLUSION
market.
To investing in gold and silver is high level of price fluctuation so the
change in price of gold and silver may affect the investor investment. The
investing in commodity market is requiring the more money so the small
investor is not able to invest in commodity market. As seen the present
scenario, there is a fluctuation due to global factor in dollar that is likely to
continue in future so, price of commodities will be also affected by it in
future.
A soft invest rate raging and a weak US dollar have increased the demand
for the commodities. A rising dollar is noninflationary. As a result a rising
dollar eventually produces product lower commodity prices. Lower
commodity prices, in turn, lead to lower rates and higher bond prices.
Higher bond prices are bullish for stocks. A falling dollar has the exact; it is
bullish for commodities and bearish for bound and equities. Why, then
cant we say that a rising dollar is bullish for bound and stock just forget
about commodities? The reason lies with long lead time in these
relationships and with the troublesome question of inflation.
59
RECOMMENDATION
Form the result that are obtained it is advisable to investor that can invest in
either of the commodity looking at the trend of any one to them. Because
there dollar and commodities prices are negatively correlated with each
other so, if one dollar become stung then commodities pieces will be
down. So, when there is highly fluctuation in dollar, it is recommended
BIBLIOGRAPHY
60
Books:
G.C.Beri. (2006), Marketing Research Third Edition, New Delhi, Tata McGrawHill Publishing Company Limited. Page no: 52-60.
Naresh k. malhotra Marketing Research Third Edition, New Delhi, Tata
McGraw-Hill Publishing Company Limited. Page no: 108, 109, 110, 112, 119, 120,
121, 122, 123.
Websites:1.
2.
3.
4.
5.
6.
http://www.mcxina.com/market data
http://www.myiris.com/commodities/statidata.php?icode=gold
http://en.wikipedia.org/wiki/beta_coefficient
http://www.commodityonline.com/commodities/bullion/1.html
http://www.mcx-sxindia.com/market data
http://www.commoditytrademantra.com/commodity-markets/closingprices-mcx
7. http://www.commodityonline.com/commodity-market/commodityprices/gold
8. http://www.commodityonline.com/commodity-market/commodityprices/nikal
9. http://www.commodityonline.com/commodity-market/commodityprices/silver
10. http://www.commodityonline.com/commodity-market/commodityprices/crudeoil
11. http://www.commodityonline.com/commodity-market/commodityprices/copper
61